Wiki Observation Codes

Louisville, KY
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I have always been under the impression that the only person who can use the observation codes is the physician who actually admitted the patient to observation. Otherwise the physician who is "consulted" while the patient is in observation care uses a new patient or established patient code. Especially since actual consult codes are not reimbursed by Medicare or several other payers. I have read in the Medicare billing manual that only the admitting can use the codes 99218-99220. Therefore I have been using the new patient or established patient codes for my physicians. My doctor's rarely admit patients and if they do I use the observation code with the AI appended. I just wanted clarification that this is correct. We've had payers attach a co-pay to the patient because it is showing as an office or established no matter that it's in a facility. Should I be using the observation codes instead and just not append the modifier AI? I've not been confused by this before but suddenly I am. Can anyone offer guidance that I am doing this correctly? Thanks.
It sounds like you are doing this correctly by my understanding. The AI modifier should not be required because that is for Medicare use on the inpatient codes to distinguish between the admitting and consulting provider's initial service. But by itself, I don't think it would cause a problem though if you used it on observation codes. Make sure that you're using place of service code 22 and not 11 for observation E&M services - using 11 could potentially trigger the copay for some payers, and it could also cause an overpayment.
yes - I are coding correctly. Only the admitting provider can bill the observation codes. If they are not admitting then we are billing 99201-99205, 99211-99215. Or in the case of a commercial payer billing the consultation code.